Colombia Infrastructure Report 2008

Colombia is very well known for its coffee, which is also a major contributor to the country's exports.

The Colombian economy has witnessed positive growth for the past three years and logged 14.3% growth year-on-year (y-o-y) in Q107, reaching a value of COP86,298bn (US$42.55bn). The signing of a free trade agreement (FTA) with the US has engendered a growing sense of confidence in the economy. The Colombian construction sector too has seen impressive growth; BMI forecasts the average industry growth rate to be 4.6% during 2008-2012.

To a large extent, the Colombian economy's growth and development have been powered by the infrastructure segment. With considerable expenditure by both private and public players, the Colombian infrastructure, particularly the transport and water infrastructure segments, has seen tremendous growth in recent years. Major infrastructural ventures in the country include the planned modernisation of the El Dorado airport at a cost of US$500-600mn, an investment of US$180mn for the development of the Buenaventura port and construction of the La Linea tunnel, valued at US$262mn.

However, Colombia's high external debt burden continues to plague the country. Furthermore, unemployment levels (estimated to be more than 11% in 2006) and high inflation are the other prominent areas of concern from a macroeconomic point of view. Insurgency and the booming illicit drugs market also need to be tackled.

This said, the Colombian economy is still expected to grow - though at a declining rate - at an average of 4.7% during 2008-2012. BMI expects the country's construction sector to reach a value of COP34,975.68bn (US$21.7bn) by 2012, contributing a sizeable 7.5% to the total GDP.